What is Forced Ranking?

Forced ranking, also known as stack ranking, is a performance appraisal system that categorizes employees into top, average, and low performers. Managers typically place a certain share of employees into each category. For example, 20% are rated top performers, 70% are satisfactory performers, and 10% are categorized as low performers.

A forced ranking system evaluates employee performance against all other employees in a department or organization and not on individual performance standards.

Organizations that use forced ranking performance appraisal may use it to offer rewards, bonuses, or promotions. Low performers may face disciplinary action or termination.

Forced ranking is a controversial method because it can create a competitive rather than collaborative workplace environment. Critics argue that it can demotivate employees, encourage unhealthy competition, and potentially lead to unfair assessments, as the system requires a set number of employees to be classified as low performers, regardless of their actual achievements.